What is Medicare anyway, and how does it work? What does it cover? Is Medicare insurance?
Though these may seem like simple questions, the answer is complex. However, you’ve come to the right place for Medicare information.
Medicare is a national United States health insurance program for people 65 and older. It is also for people with certain disabilities or end-stage kidney failure. This program is divided into various parts, and it’s important to learn how these fit together.
The History of Medicare
In July of 1965, President Lyndon B. Johnson signed a Medicare bill into law so that people 65 and older could get the healthcare coverage they needed from a national program. Initially, the coverage was limited to Part A and Part B.
Throughout the years, the coverage has evolved and changed to cover more people than it did in its early years.
Now, over 56 million people have coverage from Medicare. While Part A and Part B will provide coverage for the majority of your expenses, there are federally regulated supplemental policies that you can purchase to help fill in the gaps that aren’t covered in-full by Original Medicare.
The Parts of Medicare
Part A is hospital insurance that assists you with the cost of inpatient care and skilled nursing facility stays. It also helps with things like hospice and home health care. In general, you should think of the inpatient hospital benefit as Medicare coverage for room and board in the hospital.
It covers the cost of your semi-private room. Part A does NOT cover many of the actual treatments that might occur, such as scans or surgeries. Those fall under Part B.
The cost of Part A for most people at age 65 is $0. This is because during your working years you have paid taxes to pre-fund the premiums for your hospital benefits. If you don’t automatically qualify for premium-free coverage, most individuals can still apply for it. You’ll pay a hefty monthly premium to get it though.
Medicare Part B is your outpatient medical coverage Part B covers essentially all of your other coverage outside of your inpatient hospital fees. Without Part B, you would be uninsured for doctor’s visits (including doctors who treat you in the hospital). You would also not have Medicare coverage for lab work, preventive services, and surgeries.
More importantly, Part B covers cancer therapy and kidney dialysis. These are extremely expensive items that would cost a fortune without supplemental coverage.
The cost of Part B is set by Social Security and it changes from year to year. Individuals in higher income brackets pay more than those in lower incomes brackets. How much you pay is determined by your adjusted gross income reported to the IRS in recent years.
You can read more about the cost of Part B on our Medicare Cost page.
What is Part C and why don’t you have to enroll in it at Social Security like A & B?
We also define Part C as the Medicare Advantage program, or private insurance. The cost of Advantage plans varies by carrier, county of residence, and plan selected.
To enroll in a Part C plan, you must first be enrolled in both Parts A and B. Even if you find a Part C plan with a very low premium, you will still pay for Part B. You must also live in the plan service area.
Once you enroll, your Medicare coverage will come from the Advantage plan itself, not from the government.
The reason you don’t enroll in Part C at Social Security is that Part C is voluntary. Many people prefer to get their Medicare coverage from Original Medicare and traditional Medigap plans. These people do not want a Part C Advantage plan, so they will simply not enroll in one.
It is your choice whether you wish to opt for one as opposed to just staying with your original Medicare A & B and enrolling in Medigap.
Medicare Part D is the newest part of our national health insurance program for people age 65 & up. For half a century, there was no Medicare coverage for prescription medicines. In 2006, our federal government rolled out Part D.
You usually define Part D as a pharmacy card.
It covers retail prescription drugs that you pick up yourself at the pharmacy or order via mail order. You choose a carrier and enroll in their drug plan, and that’s how you sign up for Part D drug plan. Most states have about 30 drug plans to choose from, and the best way to determine which one is the right fit for you is to have your agent run a Part D analysis using Medicare’s prescription drug finder tool.
What is Medicare vs Medicaid?
A common question around here is how is Medicare different than Medicaid? By definition, it is a health insurance program for the elderly. Medicaid, on the other hand, is financial and/or healthcare assistance for low-income individuals. Some people 65 and older can qualify for both. In that scenario, Medicare is primary and Medicaid is secondary.
The government has several Savings Programs which you can apply for through your state’s Medicaid office. These may help you to pay your Part B premiums as well as provide drug plan assistance. Check with your state’s Medicaid office to see if you qualify.
What doesn’t Medicare cover?
This is a great question as many people are surprised to hear that Medicare does not cover every health expense that beneficiaries will encounter.
Medicare does not cover:
- Long-term care
- Hearing aids
- Routine dental care
- Routine vision care
- Medical care outside of the U.S.
- Plastic and/or cosmetic surgery
- Massage therapy
Get More Information From the Experts
Do you need help understanding your coverage options? The first step to setting up affordable health insurance is knowledge. Let our experts help you learn your basic benefits, and then we can help you with choosing the appropriate supplement plan. Call (855)732-9055 today!